Life insurance are of different types such as term life polices Endowment policies as well as whole life and unit linked insurance policies.
A term life plan is a pure survival policy. There are no benefits if you survive the term of the policy. You have to die in order to enjoy the benefits of the term life policy.
These are twin benefit plans of insurance and investment. These plans give you a different amount if you die before the maturity of the policy and a higher amount if you survive till the maturity of the policy.
You get a sum assured if you die before the maturity of the policy and a higher amount (which includes bonus) if you survive till the maturity period of the policy.
You have to pay premiums for this policy for a fixed time period. You get the maturity proceeds 60 years after taking up this policy or at the age of 80 Years whichever is later.
This policy helps you to leave a legacy (Huge sum of money) for your heirs. It is also useful if you have a disabled child.
If you are single and have no dependents then this money could be used for your estate up keep after your death or be left to a trusted worker who would maintain the estate.
You get certain additional benefits on the payment of a higher premium. If you take an accidental death benefit rider and you die in an accident you would get the sum assured in the term insurance policy as well as an additional amount from the accidental death benefit policy.
If you take a critical illness rider and you suffer from a critical illness such as (Cancer, heart attack or a stroke) then this policy pays for the cost of your treatment.
This policy is extremely useful if you don’t die but get a critical illness as you get your sum assured amounts from the term insurance policy only if you die.
These are insurance cum investment plans. Your premiums are used to procure units (Investments made in shares) in the stock markets. The higher premiums you pay more are the units allocated to you.
When the stock markets rise the value of the units increases and when the market falls the value of the units decreases.
These policies also provide you a death benefit and on your death your loved ones get the death benefit amounts.
The premiums you pay for the life insurance policy are tax deductible under Section 80 C of the income tax act up to INR 1 Lakh mainly you can deduct the amounts you invest (pay as premium) before your taxable income is computed.
The amounts you get on maturity of the policy (Maturity amounts) and even the sum assured your loved one’s get on your death from the life insurance policy is tax free.
If you are newly married or just started a family then you must have a term life insurance policy.
This policy helps to provide for your loved ones in your absence. This policy also helps your loved ones to pay off a home loan or any other pending loan from these funds.
Banks insist on a term life insurance policy before sanctioning your home loan.
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